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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Community Healthcare Trust (CHCT). CHCT is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.53, which compares to its industry's average of 16.80. Over the past 52 weeks, CHCT's Forward P/E has been as high as 11.21 and as low as 7.27, with a median of 9.73.
CHCT is also sporting a PEG ratio of 1.07. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CHCT's PEG compares to its industry's average PEG of 2.46. Within the past year, CHCT's PEG has been as high as 1.40 and as low as 0.91, with a median of 1.06.
Another valuation metric that we should highlight is CHCT's P/B ratio of 1.11. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.96. Within the past 52 weeks, CHCT's P/B has been as high as 1.55 and as low as 0.89, with a median of 1.32.
Finally, investors should note that CHCT has a P/CF ratio of 11.76. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 17.35. CHCT's P/CF has been as high as 16.40 and as low as 9.45, with a median of 11.29, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Community Healthcare Trust is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CHCT feels like a great value stock at the moment.